Just to answer a few questions, yes there is a HOA with the original house I posted about, and they have already okay-ed the idea of putting in the gravel - it's not a straight gravel operation by the way, but more along the lines of a Japanese rock garden, with a few plants here and there as highlights. I figured if I lay black plastic underneath, with a bed of gravel above a couple of inches thick, nothing is going to grow through it! A neighbor suggested using Asiatic dwarf jasmine as ground cover instead of the gravel option, while another did suggest perennial peanut. The dwarf Mondo makes me a little leery, as I half imagine the HOA screaming at us that it looks like unkempt grass in need of a mowing! As for the point about using a lawn service and writing it into the lease when we renew it, that is something we've definitely considered for our old home (the one with the pictures above of the rampant lawn) because the problem is that the area is so large that I think it puts the tenants off from keeping it well looked after. As I said, we bought a mower for the property that we wrote into the lease - they just didn't want to use it. The other house that I originally posted about though is a different situation, given that the front yard is relatively small (30' x 35'). The other issue I should have mentioned is that it isn't just case of taking care of the lawn - the present area is really in bad shape, with crab grass, bare patches everywhere, weeds, etc, and really should be replaced. That was our original intention and we had already lined up the replacement sod. But when we realized that the tenants weren't going to look after it, my wife and I looked at each other and wondered what would be the point of throwing all that money down for new sod, only to watch it either go wild through lack of attention, or die because the tenants wouldn't bother giving it the abundant twice-a-day watering needed in the first month - that or we'd have to drive over twice a day to take care of it ourselves. Then I also discovered that the sprinkler system was shot, because what I thought were mere missing sprinkler heads turned out to be crushed pipes from former tenants parking off the concrete constantly and on the lawn (a fact confirmed by neighbors) or what was left of it. So it would all have to be dug up and replaced. Throw all that into the pot, and that's why we started thinking about alternatives that would circumvent these issues, such as a Japanese rock garden with drought resistant plantings and little care required by tenants, or ground cover like dwarf jasmine that needs no watering once established - or so we're told. A last point. Yes, we've had plenty of grounds with both properties to issue evictions, but you know, who wants to do that unless really forced to? Last year the family that rented out our old home went into a divorce, the husband moved out, and the family thus lost their chief source of income because the mother was a stay-at-home parent home schooling her children - AND she had her crippled old mother living with her. Sounds like some kind of cliche, right? They ended up getting three months behind on rent, we even put their security deposit towards the payments (with the tenant's permission) to try and keep them afloat, yet reached a point eventually where we simply couldn't afford to keep making two mortgage payments and were virtually begging this woman to find a job to save us having to evict her. My wife and I just sat there totally stressed and virtually in tears, asking ourselves how we'd ever reached a point where we were going to be forced to toss a financially destitute woman, with her two young children and an elderly grandmother, on the street. To say it was a horrible feeling doesn't even come close, but thankfully her church eventually came to the rescue and she eventually dug her way out of the her precarious financial state. The fact she's letting the house virtually fall apart outside, and all the disingenuous excuses she uses to cover it, have worn down our last reserves of kindness, and we have already told her that three years is more than enough and that she needs to find another place to live in when the current lease runs out. Thanks again for all the response. It's been really enjoyable seeing what everyone has to say on the matter.

I don't know if it makes any difference, but our 1031 adventures have all been within a separate trust that was established by my late mother, of which I am trustee with power to appoint. The trust sold one property. The trust bought a second property using 1031 exchange laws. The value of the property is now more than 12 times the base cost -- a very hefty capital gain even at the current 15% rate. I know we could sell and reinvest only a portion, and pay taxes on the rest. I know I could appoint this property out of the trust to, say, our DS and DIL or our DGS (age 2). What I'm wondering is if it isn't best to let them "inherit" the trust holdings. What I don't know is if they will also inherit the tax base or if the 1031 property resets to date of inheritance.

Blue Velvet Elvis -- since I live only an hour from you --- here is what I would do. You have a ton of options to have guests -- I would list it as a "guest house" -- contact the University of Iowa (would be great for game weekends) University of Iowa hospitals -- the Chamber of commerce in Kalona -- I would create a cute flyer or brochure and put them in the shops along Rte 1. The Rug Cottage -- Sisters Garden. Rte 1 has been listed at a great route to see fall foilage --- tap into that. Even if you don't serve breakfast -- keep the fridge stocked with some local fruit and cider this time of year. In the winter --- hot chocolate and mulled cider mixes would be nice. Really make it cute -- antique-y -- Iowa -- You have fantastic resources in the area. Also check with Riverside Chamber or Visitor center --- they should be able to put you on a list. Any ?'s -- you can email me directly. Cathy

I recently sold all my rental property, and then more recently bought more. I believe that the success or failure of income property is determined by the owner. First, and most importantly, despite what the IRS says, being a landlord is not passive income. Owning rental property is about turning your extra time or your skills into income. These skills can be something as simple as persistent attention to detail, or hard skills like being a licensed contractor, or they can be a lot of extra time. Second, it is tempting to look at income properties as cash flows, that is not a good idea. Rental property should not be an effort to collect money in excess of payments + taxes + insurance + maintenance. You should always keep an eye on your net position, if it helps you can think of this as the excess rental payments plus equity increases. My general attitude on tenants is to be the best landlord possible and good renters will find their way to you. On a couple of occasions I have rented to friends for one reason or another. I will not collect money from friends ever, so I contracted out to a property management company on those occasions. While I too am generally against mixing friends and money, if you end up going through with this idea, protect your friendship and your investment by considering all the ways it can go bad and counter as many of them as possible in the beginning. Every ambiguity is a potential problem so eliminate them all before you start.